Grey-Bruce livestock producers were facing some major challenges, and then along came COVID-19.
Even before the pandemic hit, plant closures and a lack of packing capacity, oversupply concerns and a disconnect between what farmers get for their product and what it sells for to consumers have been weighing on producers’ bottom lines. But now producers are feeling the pinch even more with processing plants having to shut down because of sick workers, delays in getting cattle to processors in the U.S. and lower demand from the restaurant sector.
“Here in Ontario it seems like it is one thing after another,” Ken Schaus of Elmwood-based Schaus Land and Cattle Company said Thursday.
“The backup and uncertainty has caused a huge depression in the price, and that is costing farmers lots of money.”
Schaus said that due to COVID-19 farmers are losing about $250 per animal right now and that number keeps going higher.
“In this area, cattle, hogs and agriculture are one of the top drivers of the economy,” Schaus said. “I get a lot of calls in a day I have never had before. People are desperate and they are in trouble.”
The problems in the sector didn’t all happen overnight, but they have certainly been exacerbated by the pandemic, Schaus explained.
About half a decade ago, Ontario’s cattle inventory was at a low point. But the supply has increased rapidly since then with producers undertaking major expansions on the back of the very successful Ontario corn-fed beef program.
“There have been lots of barns going up in Grey-Bruce and all across Ontario,” said Schaus. “The feeding capacity has expanded beyond belief, but now we have all these cattle but no new places to go with them.”
Other factors that have contributed to the oversupply include U.S. plants that no longer take Canadian cattle, an overabundance of cull cows coming to market in Ontario, plant closings in Quebec in recent years, as well as the closure last fall of a Toronto-based plant that slaughtered 400 cattle per day.
“We do have a unique advantage as far as feeding cattle in the eastern part of Canada, but when you can’t harvest them all that is a problem,” Schaus said. “The whole COVID thing has just multiplied the issue.”
Schaus said there were some cattle that were sold and to go to Pennsylvania two weeks ago, but due to COVID-19, they are still standing in Ontario feedlots with no clear idea of when they will be going. In western Canada, three major plants have had shutdowns and slowdowns because workers have tested positive for the virus.
It impacts producers all the way down the supply chain, from the fat cattle ready to be processed, to the feeder cattle ready to be moved to the feedlots, to the calves ready to be moved to pasture.
“When you start looking at the amount of cattle that have to go every day, it is pretty hard to stop the whole production cycle. You just can’t slow cattle down. It is not that easy,” Schaus said, adding pork producers are facing a similar situation.
Aside from financial payments like some struggling agricultural sectors in the U.S. have received, Schaus said a set-aside program would be a big help in Ontario.
In recent days there have been calls to reintroduce a program like one implemented during the BSE crisis in the early 2000s. The set-aside program would cover a portion of producers’ costs that come with waiting to send their cattle to market.
The Canadian Cattlemen’s Association has said cattle producers are in a critical situation and has asked that such a program be implemented immediately. They are currently in discussions with the federal government on the recommendation.
Beef Farmers of Ontario President Rob Lipsett, who farms cattle near Annan, said that just like everyone else right now, producers are facing a lot of uncertainty due to the fluidity and volatility of the current situation and a set-aside program would be helpful.
“It seemed to help during the BSE years to spread out some of the marketing,” he said. “If we do have a plant closure that would definitely be a key to seeing our industry make its way through the pressure that would be put on it.”
Lipsett, who is also a director of the Canadian Cattlemen’s Association, said currently his biggest concern is the fallout if a positive case of COVID-19 turns up in a worker at an eastern Canada processing plant.
“Our processing capacity is in a shortage and a backlog to begin with,” said Lipsett. “It doesn’t even have to be one of our bigger plants, but if we lose the processing capacity even through one of our smaller plants, we may be stuck in a dire situation.”
Lipsett said cattle farmers are are also working with other commodities to lobby for some changes to both provincial and federal risk management programs to ensure there are funds available if there is more widespread devastation to the agricultural industry as a whole.
“It is hard to pinpoint exactly what we are going to need,” said Lipsett. “If everything worked out in our favour we wouldn’t need any help at all, and of course that would be well received by every farmer as it is a sense of pride for us to make it through situations on our own.”
Bruce-Grey-Owen Sound Conservative MP Alex Ruff said he is hearing a lot from concerned producers right now.
Ruff said he is being told that while the federal government has announced a number of programs for individuals and businesses, such as the Canada Emergency Wage Subsidy and Canada Emergency Business Account, farmers in a lot of sectors don’t qualify or don’t see programs as beneficial to their operations.
Ruff said a $5-billion lending increase to Farm Credit Canada doesn’t benefit those farmers who aren’t looking to borrow any more money.
This week, the federal Liberals have announced new spending to assist farmers, including $20 million for the Canadian Food Inspection Agency to ensure it has enough inspectors and a program that provides employers with $1,500 per temporary foreign worker to pay some of the costs for them to quarantine upon arriving in Canada.
Ruff says more is needed and hopes the Liberal government listens to recommendations put forward by the CCA, the BFO and his own Conservative Party.
“They list some solid recommendations from our party to the government to say, hey let’s take some of these actions that are being proposed as a way to help farmers out and allow them to get through this,” said Ruff. “Ultimately our food supply is the most important think to keep moving because if we don’t have food and we are all starving, then the disease won’t really matter then.”
One of the recommendations from Ruff’s party is that the set-aside program be implemented immediately.
Federal Agriculture Minister Marie-Claude Bibeau has said she is reviewing the proposal from the CCA.
But Ruff said he and other Conservatives have been frustrated with the federal government for missing a deadline to apply for a more favourable BSE risk designation for beef exports. He said having Canada’s BSE risk status upgraded to “negligible” would help the industry.
“As soon as that BSE status changes it does open up additional processing plants in the U.S. that currently don’t take Canadian beef because it impacts their ability to export to foreign markets,” Ruff said. “It is vital.”
Meanwhile, Lipsett said another area he has been focusing on of late is the mental health of farmers.
“Financial crisis is the biggest driver of mental health issues in our business and we can’t forget this is putting a lot of stress on a lot of people,” said Lipsett. “I am encouraging all farmers to reach out, whether it be family or friends or even a mental health professional. Don’t suffer through this on your own.”